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2016 (11) TMI 252 - ITAT DELHIAddition towards closing stock as suppressed - Held that:- We find that in remand proceedings, the Assessing Officer himself has analysed the submission of the assessee and satisfied himself that the items worth ₹ 48,08,683/, under reference, were appearing in the closing stock. In our opinion, once the Assessing Officer has himself admitted that there was no understatement of the stock and accordingly on the basis of his comments, the learned Commissioner of Income-tax (Appeals) has allowed relief to the assessee and then subsequently filing further appeal on the same issue is not justified unless any discrepancy or intentional misreporting of facts by the Assessing Officer in remand report is observed. In our opinion, the findings of the learned Commissioner of Income-tax (Appeals) on the issue in dispute is well reasoned, and no interference on our part is required, accordingly, we confirm the finding of the learned Commissioner of Income-tax (Appeals) on the issue in dispute . - Decided against revenue Addition under the head ‘Detention and Demurrage Charges’ - payment in the nature of penalty or not - Held that:- We find that the assessee has given detail of bills in respect of ‘Detention and Demurrage Charges’ before the learned Commissioner of Income-tax (Appeals). The complete detail of the expenditure under reference including invoices raised by the parties were forwarded to the Assessing Officer, who did not dispute the expenses were in violation of the statutory acts or laws and therefore not allowable under section 37 of the Act. It is clear from the perusal of the details and submission that these “Detention and demurrage charges” represent contractual charges paid for delay in loading/unloading of material and are part of normal business activities. There is no element of any violation of statutory Acts or Laws. Rather these payments are in the nature of compensation for breach of contractual obligations. Various court’s decisions cited by appellant in its submission above squarely favour the view that there is no penal element in this expense. - Decided against revenue Deduction under section 80IB - converting the proprietorship into a partnership firm resulted into transfer of plant and machinery previously used by the undertaking - Held that:- The issue has already been decided in favour of the assessee by the judgment of the jurisdictional High Court reported in . Prisma Electronics, M/s. Advance Valve Global [2014 (8) TMI 209 - ALLAHABAD HIGH COURT ] wherein held that the Tribunal was justified in dismissing the appeals of the revenue holding that the assessee was entitled for deduction under Section 80-IB of the Act and was not hit by the provisions of Section 80-IB(2)(i) of the Act. The Tribunal was also justified in holding that upon conversion of the proprietorship concern to a partnership concern there was no transfer of plant and machinery to the partnership firm, inasmuch as there was a transfer of the industrial undertaking as a whole along with its assets and liabilities.- Decided against revenue Rejection of books of accounts - estimating gross profit - Held that:- We find that the assessee has explained fall in gross profit rate as computed by AO. The assessee has thereafter for the purpose of comparison of results with last year converted the result of this year in the form of job work and explained that gross profit rate of the assessee in the year under consideration should have been 35.75%, which is much more than the gross profit rate of 24 percent declared by the assessee in the immediately preceding year. The Assessing Officer failed to notice functions carried out with assessee in immediately preceding year, which the assessee explained before the learned Commissioner of Income-tax (Appeals). We also agree with the finding of the learned Commissioner of Income-tax (Appeals) that the Assessing Officer has not found any discrepancy or defect in the books of accounts of the assessee and, therefore, rejection of books of accounts merely on the low gross profit rate was not justified.- Decided against revenue
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